01—Abstract
Summary
Summary of the 10-Q filed June 12, 2024. Cited figures are marked; the original filing is the authoritative source.
Ross Stores, Inc. (ROST) reported a strong first quarter for fiscal year 2024, with significant year-over-year growth in sales and net earnings.
Total sales increased by 8.1% to $4.86 billiona, driven by a comparable store sales growth of 3%. Net earnings saw a substantial increase of 31.3%, reaching $488.0 million, translating to diluted earnings per share (EPS) of $1.46, up from $1.09 in the prior year period. This performance demonstrates the company's ability to navigate current macroeconomic challenges and deliver value to its core customer base.
The company continues its strategic store expansion, opening 18 new stores in the quarter and planning for approximately 90 new store openings in fiscal 2024. Management highlighted improved cost efficiencies, with Cost of Goods Sold and Selling, General, and Administrative expenses decreasing as a percentage of sales. Furthermore, robust cash flow from operations and a strong liquidity position, including $4.7 billionb in unrestricted cash, provide the company with significant financial flexibility for continued growth and shareholder returns through dividends and share repurchases.
02—Key points
Key Highlights
- Total sales increased by 8.1% to $4.86 billion in Q1 FY2024, compared to $4.49 billion in Q1 FY2023.
- Comparable store sales grew by 3% year-over-year, indicating strong in-store performance.
- Net earnings surged by 31.3% to $488.0 million, with diluted EPS rising to $1.46 from $1.09.
- The company opened 18 new stores in Q1 FY2024 and plans to open approximately 90 new stores in fiscal 2024, continuing its expansion strategy.
- Cost of goods sold as a percentage of sales decreased by 140 basis points due to lower distribution, buying, and freight costs.
- Selling, general and administrative expenses as a percentage of sales decreased by 65 basis points due to higher sales and lower incentive compensation.
- The company maintained a strong liquidity position with $4.7 billion in cash, cash equivalents, and restricted cash, and had $1.3 billion available under its revolving credit facility.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Ross Stores, Inc. kept $0.10.
- Revenue$4.86B100.0%
- Cost of revenue−$3.49B71.9%
- Gross profit$1.37B28.1%
- Operating costs−$776.3M16.0%
- Operating income$591.1M12.2%
- Interest, other & tax−$103.1M2.1%
- Net income$488.0M10.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed June 12, 2024Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $4.86B$4.49B | +8.1% |
| Cost of Revenue | $3.49B$3.29B | +6.0% |
| Gross Profit | $1.37B$1.20B | +13.8% |
| SG&A Expenses | $776.28M$746.22M | +4.0% |
| Operating Expenses | $4.22B$4.01B | +5.3% |
| Operating Income | $591.11M— | — |
| Net Income | $487.99M$371.19M | +31.5% |
| EPS (Basic) | $1.47$1.10 | +33.6% |
| EPS (Diluted) | $1.46$1.09 | +33.9% |
| Shares Outstanding (Basic) | 331.26M338.05M | −2.0% |
| Shares Outstanding (Diluted) | 333.74M340.04M | −1.9% |
05—Questions
Frequently Asked Questions
What was Ross Stores' revenue and earnings performance in the first quarter of fiscal year 2024?
Ross Stores reported total sales of $4.86 billion, an 8.1% increase compared to the prior year's first quarter. Net earnings rose significantly by 31.3% to $488.0 million. Diluted earnings per share (EPS) was $1.46, a notable increase from $1.09 in the same period last year. Comparable store sales also grew by 3%.
What is the company's outlook for store growth?
Ross Stores continues its expansion strategy, opening 18 new stores in the first quarter of fiscal year 2024. The company plans to open approximately 90 new stores throughout fiscal year 2024, indicating ongoing investment in physical footprint growth.
How did the company manage its costs and expenses?
The company demonstrated improved cost management. Cost of goods sold as a percentage of sales decreased by 140 basis points, driven by lower distribution, buying, and domestic freight costs. Selling, general, and administrative expenses as a percentage of sales also decreased by 65 basis points, attributed to higher sales volume and reduced incentive compensation expenses.
What is the company's financial health and liquidity position?
Ross Stores maintains a strong financial position with $4.7 billion in cash, cash equivalents, and restricted cash as of May 4, 2024. Additionally, the company has a $1.3 billion senior unsecured revolving credit facility available, with no outstanding borrowings at the end of the quarter. Management believes these resources are adequate to meet operating needs, capital investments, debt repayments, and shareholder returns for at least the next 12 months.
06—Continue